Australia: Younger generations face mortgage debt in retirement

New research from Vanguard indicates that retiring mortgage-free is becoming increasingly difficult for younger Australians. According to the 2026 ‘How Australia Retires’ report, 48% of Gen Z and 37% of Millennials expect to still be paying off home loans at the time of their retirement.

This contrasts sharply with Baby Boomers, 71% of whom report owning their homes outright. The shift is attributed to rising property prices, larger debts, and cost-of-living pressures. To manage this, 45% of those expecting to retire with a mortgage plan to continue making repayments during retirement, while 39% intend to use their superannuation balances to pay off their loans in a single transaction.

Experts warn that using superannuation to clear housing debt could significantly reduce the funds available for daily living expenses in retirement, potentially diminishing the overall boost to retirement income despite larger accumulated balances.